Why You Still Can’t Use a Chip Card Everywhere
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If you can find a place that takes credit cards, the dutch cards will also use Chip+PIN. Non-PIN credit cards (mostly americans) can swipe, but they'll almost certainly have to enter their PIN... In the many times I've used my US CC in NL I've never had to sign.
Now that RFID transactions are becoming more popular it will be interesting to see how this all develops.
I don't know about the Netherlands, but it's typically used where the risk is low, or making on-line transactions is inconvenient. For example, paying for a train ticket on-board a train (data signal is unreliable, the real loss to the train company is negligible) or buying fast food.
It's visible to the customer as a much faster process -- you can remove your card around a second after you enter your PIN, instead of waiting 4-5 seconds for authorization.
-The east coast, Cape Cod area - if I remember correctly, I was having dinner in Falmouth or perhaps in Woods Hole when the imprinting device appeared. Could have been backup for their normal credit card machine, though - didn't think to ask at the time.
The first time I used my credit card and they used one of those card imprint thingies and asked me to sign, I naïvely thought they were trying to con me.
In fairness, though, my native Norway was a quite early chip adopter as the banks had to bear the cost in case of fraud as long as the user had not exhibited gross^2 negligence - my first debit card (1993) was chipless, but the 1995 replacement had a chip - whose use was voluntary at first, then enforced a few years later.
Also there has been this idea that it's for other countries with worse comms networks and high fraud levels, despite the fraud actually being worsr in the US as skimming magnetic stripes is still viable.
Personally, I liked it, but it's different enough that most customers would probably hate it... And the restaurant definitely didn't like it. I could read it in their faces every time they brought the bill and explained the system. (I'm regular enough that they eventually stopped explaining, though.)
Other businesses have to deal with people just plain not understanding what's going on for a while. Many people here are so set in their ways that a small thing like "insert" instead of "swipe" is enough to confuse them to the point of having a bad shopping experience, which is obviously bad for business, not to mention how much longer it takes to check people out when they spend so long fiddling with the card machine.
Finally, neither the store nor the customer were responsible for fraud. With the credit card company taking the hit for that, there's very little incentive for them to change.
This is what [1] terms "Table pay", but it also gives "Tip Allowance", which seem to be the system you've described.
At least in Britain, before Chip+PIN cards (12 years ago), paying by card in a restaurant was considered somewhat risky — waiters weren't trusted not to clone the card. Perhaps that's why customers were happy to use "Table pay".
[1] http://www.emv-connection.com/managing-card-based-tip-and-gr...
I've certainly never seen an option like that in NL. The three common things I see here are 1) you say "make it amount X" before staff enters the amount in the terminal, 2) you leave some extra cash on the table after paying the normal amount with your card, 3) just don't tip (which is acceptable here since wages are decent enough).
Now the same situation in the UK - you report your card as stolen, the bank refunds you, but also takes the money away from the merchant(saying that the responsibility to check the signature was on them and they failed, so they lose the money). As a result, almost no one in UK accepts signature-only cards, because you could literally buy something, sign the receipt, walk out and report the card as stolen - and the merchant loses all the money. So merchants had all the incentive to upgrade their terminals to chip-and-pin only, terminals which can take magnetic-strips are just super rare and usually not supported even if the machine has them.
edit: it looks like signature fraud in US is not always on the bank. My mistake, sorry.
Before chip+pin (in Netherlands), swipe+pin was used. For fraud the client was already responsible. In practice the bank almost always reimbursed the client. To restrict the fraud/skimming, cards are often restricted to be used in Europe only. A setting you can easily change.
Due to above, usually non-European tourists are now affected by skimming.
I prefer the tap to pay btw. Banks restrict which machines can get money off these cards and in practice it is usually the typing in of your PIN which is the biggest problem. Depending on the bank you can change the max tap to pay amount.
> terminals which can take magnetic-strips are just super rare and usually not supported even if the machine has them.
I've not found this to be the case. I used a non-chip US card here in the UK extensively over the last year or so, and I've never once encountered a merchant that didn't want to take my card, nor a terminal that didn't read magnetic strips.
I do find people at checkouts to be a little surprised by someone having to swipe & sign, since that's quite rare now. And often they had trouble finding a pen for me to sign with :) But I was always able to complete the transaction nonetheless.
I can imagine a cashier just rolling their eyes at an American using a weird card, but being much more distrustful of a Polish person doing the same.
Contactless, no thanks, I don't want somebody to swipe my purse without me knowing and as far as I googled it's not clear that Faraday bags really work. Contactless passports too.
Then, when you tried to use your legit card, the on-card transaction count would clash and the card and clones would be frozen. You, as the obvious owner of the card, would be free of all liabilty and due a refund (the bank would not kick up a fuss about this, it is in their interest to reduce friction in these low amount cases to drive technology adoption).
http://www.securityweek.com/contactless-visa-cards-vulnerabl...
> "With just a mobile phone we created a PoS terminal that could read a card through a wallet," said Martin Emms, lead researcher on the project. "All the checks are carried out on the card rather than the terminal so at the point of transaction, there is nothing to raise suspicions. By pre-setting the amount you want to transfer, you can bump your mobile against someone’s pocket or swipe your phone over a wallet left on a table and approve a transaction. In our tests, it took less than a second for the transaction to be approved."
Last year, the major card issuers changed their contract terms to impose the cost of fraud on the merchant if the merchant didn't have a chip-enabled terminal, but:
1. Merchants are suing to have this overturned because they don't want to pay for an upgrade if they can get a court to force the old terms to stay in place, and
2. They're pushing hard on a narrative of "chip transactions are slow, so slow, you have to wait so long because it's so slow, wouldn't you rather just swipe your card quickly than deal with the slow slowness of these slow chips with their slow transactions, and did we mention they're slow" to try to turn the public against chip cards.
3. Probably the next big upgrade will actually be to support NFC-enabled devices like cell phones, bypassing the need for a separate physical card entirely.
I haven't seen those. Which merchants are involved?
The lawsuits I've seen over chip cards were merchants who want to switch and are upset either because the card consortium is being too slow, or because the merchants want to require PINs and the card companies won't allows that:
• B&R Supermarket. Bought new NCR Equinox L5300 terminals to be ready for chip cards well before the deadline, installed them, trained their staff, and asked the card network consortium for certification. Liability shift deadline came but the consortium has not certified B&R yet, and now B&R is getting hit by a lot of fraud and chargeback charges that they had not suffered before. They are annoyed that the same group that is taking so long to certify them is also the group the benefits from the liability shift, and so are suing.
• Home Depot. They have upgraded their terminals to accept chip cards, but want to require PINs reather than signatures. Suing to try to force the card companies to allow that.
• Walmart is suing Visa over the same issue.
• Kroger. Same issue.
Well... chip transactions are slow. I'd estimate about 3x slower than the old swipe transactions. It's a genuine annoyance and lots of people complain about it, customers and merchants alike.
Now my grocery store, Publix, doesn't take the chip card but I don't mind swipe and pin. they also don't do Apple pay so I am out for that option.
So give me A/Pay, chip and pin, or forget it. I guess since I have not suffered an identify theft issue I am not totally dead set against retailers not up to date.
This article seems to have ignored the real reason why the US opted for "chip and sign" instead of "chip and pin". The thinking was that if Americans had to remember a PIN for all of their credit cards they would likely narrow their credit card usage to a single card - the one they memorized the PIN for rather than using one of the 3 or 4 other cards they posses.
And I just had to laugh at this:
“Consumers may think that it feels a little bit longer because the card is in the terminal the whole time instead of just swiping it and sticking it right back in your wallet,” said Stephanie Ericksen, Visa’s vice president of risk products. “But the actual transaction itself is taking the same amount of time. It’s just that you’re watching your card be there while the information is going out and coming back.”
Total BS. The actual "transaction time is on the order of milliseconds , the time spent waiting for those milliseconds is closer to 20 to 30 seconds.
In Europe, from pressing "OK" after typing in a PIN, it takes about 2-5 seconds before the card can be withdrawn.
In-person fraud is much lower, so this transition to chip readers is just increasing their bottom line by 1) sticking it to retail merchants who don't upgrade their systems; and, 2) making money off required system upgrades.
What's worse is you can still do a transaction without a PIN, leaving open the opportunity of someone just stealing your card. The only fraud this really prevents right now is copied cards.
It's crazy to me the payments industry can get away with charging $500 for these card readers too. Most chip readers I've seen still have to dial up to charge a card.
I think you mean the American Chip+PIN system, as implemented. In most other countries, a PIN is required.
I've used Chip+PIN cards since they were launched in the UK in 2004. Malfunctioning readers are very rare, and the suggested flaws don't seem to have resulted in anything.
I don't know, unless the terminal has a bad connection it usually takes less time than writing a signature, even in online mode.
> The chip readers are prone to malfunction, and I'm sure they will be cracked in due time.
The technology has been in wide use for decades in Europe. I'm pretty sure the existing chip readers aren't very prone to malfunction, unless for some reason the US is completely redeveloping everything from scratch.
Also, they haven't been cracked yet as far as I know.